Today's Law As Amended

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SB-18 Green hydrogen.(2021-2022)

As Amends the Law Today

 (a) The Legislature finds and declares all of the following:
(1) Climate change and air pollution threaten the health and prosperity of all Californians. Historic droughts, devastating wildfires, storms, extreme heat, and the death of millions of trees are creating billions of dollars in property damage and threatening human health and food supplies.
(2) California has set ambitious targets to reduce the effects of climate change by reducing carbon emissions 40 percent below 1990 levels by 2030 and 80 percent below 1990 levels by 2050.
(3) In 2018, Governor Brown issued Executive Order No. B-55-18, creating a state goal to reach greenhouse gas neutrality by no later than 2045 and to maintain net negative greenhouse gas emissions thereafter, and directing the State Air Resources Board to work with relevant state agencies to develop a framework for implementation and accounting that tracks progress toward these goals.
(4) California’s leadership in driving aggressive emissions reductions has helped bring to market many new forms of renewable energy and fuels, including supporting a rapid decline in prices for renewable power such as solar, wind, and battery storage, and has accelerated adoption and price reduction of zero-emission vehicles. The cost of utility-scale solar power dropped by 50 percent in just four years between 2011 and 2015, and electric vehicle battery prices dropped 87 percent in real terms from 2010 to 2019.
(5) Multiple studies show that renewable hydrogen, particularly green electrolytic hydrogen produced by splitting water, is poised to experience similar cost declines over the next decade.
(6) Achieving these cost reductions and deploying green hydrogen at scale would help decarbonize many difficult-to-decarbonize sectors, including buildings, industry, thermal power plants, and the transportation sector, including light-, medium-, and heavy-duty vehicles, goods movement, and air travel, and accelerate progress towards the state’s climate, clean air, and clean energy goals.
(7) Green hydrogen offers many climate and energy cobenefits, including better utilizing curtailed power and better integrating renewable resources into the electrical grid to achieve greater than 100 percent zero-carbon energy and put renewable electricity to use to decarbonize many other sectors of the economy.
(8) Green hydrogen is a flexible resource that can be used for many things, including oil refining, ammonia and fertilizer production, and other industrial and chemical processes; storing renewable and zero-carbon electricity for multiple days and seasons; powering a variety of onroad, off-road, rail, aviation, and maritime transport and materials handling applications; providing dispatchable electricity production including enhancing resiliency for behind-the-meter emergency backup generation and islanded microgrids; displacing coking coal used in the production of steel; fueling industrial thermal applications; and decarbonizing the existing natural gas pipeline.
(b) It is the intent of the Legislature to develop a leading green hydrogen industry in California in order to provide accelerated clean air, climate, and energy benefits, better integrate existing renewable resources into the electrical grid, create jobs, and provide new clean technology to decarbonize challenging sectors.

SEC. 2.

 Section 38561.7 is added to the Health and Safety Code, to read:

 (a) Not later than December 31, 2022, as part of the scoping plan prepared pursuant to Section 38561 and the state’s goal for carbon neutrality, the state board shall prepare both of the following:
(1) A strategic plan for accelerating the production and use of hydrogen, including a specific plan to accelerate production and use of green hydrogen, in California to help meet the goals set forth in this division. For purposes of this section, “green hydrogen” has the same meaning as defined in Section 400.2 of the Public Utilities Code. The scoping plan shall include all of the following:
(A) A strategic plan for promoting, scaling, and utilizing green hydrogen in the state to help achieve the state’s climate, clean energy, and clean air objectives.
(B) An assessment of difficult to decarbonize sectors of the economy for which green hydrogen may be a more feasible and cost-effective decarbonization method than other alternatives. For purposes of this section, to “decarbonize” means to reduce or eliminate associated emissions of greenhouse gases. This assessment shall include an estimate of the amount of greenhouse gas emissions reduction and air quality benefits the state could achieve through deploying green hydrogen through a variety of scenarios and the costs associated with using green hydrogen, when compared to other alternatives.
(C) A review of similar efforts to deploy hydrogen internationally, including opportunities to collaborate with other jurisdictions to accelerate market scale, cost reductions, and global climate benefits.
(D) Recommendations to the Legislature for legislative or agency actions to implement the strategic plan. The recommendations shall include
recommendations on how to overcome market barriers and accelerate progress in green hydrogen production and use, including through demonstration projects, incentives, financing mechanisms, or other policies, and recommendations to maximize economic, environmental, and equity benefits resulting from increased utilization of green hydrogen.
(E) A strategic plan for supporting hydrogen infrastructure and end uses in difficult to decarbonize sectors of the economy for the purpose of preparing infrastructure and end uses for green hydrogen deployment. This plan shall identify policies that promote the reduction of economywide emissions of greenhouse gases through the deployment of hydrogen, including green hydrogen, while ensuring that hydrogen infrastructure will support the employment of a skilled and trained workforce in California to perform that work.
(F) The strategic plan should also include the potential for other forms of hydrogen, outside of green hydrogen, to achieve emission reductions that can contribute to achieving the state’s climate, clean energy, and clean air objectives.
(2) An analysis of how curtailed electrical generation could be better utilized to help meet the goals set forth in this division, including, but not limited to, whether curtailed electrical generation could be made available for the production of green hydrogen. The state board shall consult with the Independent System Operator in the preparation of the analysis.
(b) In developing the strategic plan pursuant to subdivision (a), the state board shall consult the California Workforce Development Board and labor and workforce organizations, including those that administer state approved apprenticeship programs that train workers to construct, install, and maintain hydrogen infrastructure.

SEC. 3.

 Section 25327.5 is added to the Public Resources Code, to read:

 (a) As part of its next update to the report required pursuant to section 25301, the commission shall study and model potential growth for hydrogen and its role in decarbonizing the electrical and transportation sectors of the economy, and helping to achieve goals set forth in The 100 percent Clean Energy Act of 2018 (Chapter 312 of the Statutes of 2018), the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500 of the Health and Safety Code)), and the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015). For purposes of this section, “decarbonizing” means reducing or eliminating associated emissions of greenhouse gases.
(b) Pursuant to Section 10231.5 of the Government Code, this section becomes inoperative on June 1, 2026, and is repealed on January 1, 2027.

SEC. 4.

 Section 380.1 is added to the Public Utilities Code, to read:

 (a) Except as provided in subdivision (b), the commission shall modify the resource adequacy requirements established pursuant to Section 380 and accounting rules to provide equal consideration for dispatchable local and system resource adequacy resources made from green hydrogen, as defined in subdivision (a) of Section 400.2.
(b) If insufficient information exists to consider a hydrogen resource pursuant to subdivision (a), the commission may make a finding that the resource cannot be considered for resource adequacy purposes.

SEC. 5.

 Section 380.6 is added to the Public Utilities Code, to read:

 In a new rulemaking proceeding related to energy storage, the commission shall consider green electrolytic hydrogen, as defined in subdivision (b) of Section 400.2, as part of encouraging portfolio diversity.

SEC. 6.

 Section 400.2 of the Public Utilities Code is amended to read:

 For the purposes of this article, the following definitions apply:
(a) “Green hydrogen” means hydrogen gas that is not produced from fossil fuel feedstock sources and does not produce incremental carbon emissions during its primary production process.
For (b)   the purposes of this article, “green  “Green  electrolytic hydrogen” means hydrogen gas produced through electrolysis and does not include hydrogen gas manufactured using steam reforming or any other conversion technology that produces hydrogen from a fossil fuel feedstock.

SEC. 7.

 Section 400.3 of the Public Utilities Code is amended to read:

 (a)  The commission, State Air Resources Board, and Energy Commission shall consider green electrolytic hydrogen an eligible form of energy storage, and shall  both green hydrogen and green electrolytic hydrogen as a zero carbon-emitting resource pursuant to Section 454.51, and a zero-carbon resource pursuant to Section 454.53, shall work to include green hydrogen in the integrated resource plan required pursuant to Section 454.52, and shall  consider other potential uses of green electrolytic hydrogen. hydrogen in all of their decarbonization strategies. 
(b) A green hydrogen or green electrolytic hydrogen resource shall only be considered a zero-carbon resource if it complies with protections against resource shuffling pursuant to section 454.53.